Ichor (US:ICHR)2022-02-28 21:07Financial Performance - Revenue for 2021 was $1,096.9 million, a 20% increase from $914.2 million in 2020[20] - Net income for 2021 was $70.9 million, up from $33.3 million in 2020, representing a 113% increase[20] - Total indebtedness as of December 31, 2021, was $295.0 million, with $7.5 million due within 12 months[231] - A hypothetical 100 basis point change in the interest rate on outstanding debt would have resulted in a $1.9 million change to interest expense during 2021[231] Capital Expenditures and Efficiency - Capital expenditures were $20.8 million in 2021, only 1.9% of sales, indicating a capital-efficient business model[25] - The focus on operational efficiency has allowed the company to reduce manufacturing cycle times to less than four weeks[24] - The manufacturing process allows for a rapid order-to-delivery cycle, with gas delivery systems taking as little as 20 to 30 days to manufacture after order receipt[41] - The company utilizes just-in-time stocking programs to manage component inventories effectively and respond to customer demands[45] Market Strategy and Growth - The company aims to grow market share within existing customers by leveraging specialized engineering talent and early collaboration[26] - The acquisition of IMG Companies in November 2021 expanded product offerings and opened new market opportunities[28] - The chemical delivery market is identified as an underpenetrated growth area, with plans to increase market share[27] - The company is actively engaging with new customers in sectors such as medical, aerospace, and defense[29] Customer Relationships and Market Position - The company has established long-standing relationships with top-tier customers, including Lam Research, Applied Materials, and ASML[23] - In 2021, the two largest customers were Lam Research and Applied Materials, contributing 53% and 32% of total sales, respectively[38] - The semiconductor equipment market is highly concentrated, with five companies accounting for over 80% of all process tool revenues[38] Intellectual Property and Human Resources - The company holds 58 granted patents and has 31 pending patent applications, focusing on securing intellectual property protection[51] - As of December 31, 2021, the engineering team comprised approximately 90 engineers and designers, closely collaborating with customers[47] - Approximately 1,850 full-time employees and 690 contract workers were reported as of December 31, 2021, with a significant portion engaged in manufacturing[54] Operational Standards and Compliance - The company operates ISO 9001 certified facilities and adheres to strict design tolerances and specifications in manufacturing[42] Competition and Market Dynamics - The fluid delivery subsystem market is competitive, with primary competition from Ultra Clean Technology and numerous smaller suppliers in related industries[50] Financial Risks and Currency Exposure - The company does not expect foreign currency exchange rate fluctuations to have a material effect on its results of operations[229] - Foreign currency transaction gains and losses have not been material to the financial statements to date[230] - The company has not engaged in any foreign currency hedging transactions[230] - Operating expenses may be subject to fluctuations due to foreign currency exchange rates, particularly in Singapore dollar, Malaysian ringgit, British pound, and euro[230] - Increases in the value of the U.S. dollar could negatively impact the company's ability to compete[229] - The company has not been exposed to material risks due to changes in interest rates[231] - The interest rate on outstanding debt is based on BSBY, plus an applicable rate depending on the leverage ratio[231] - The company does not enter into investments for trading or speculative purposes[231]